How to avoid double taxation of car tax
Discussion
So, I sold my car on Saturday 25th January to the first viewer, without even advertising it, so a great result! The buyer has placed a deposit and we have arranged for me to deliver the car to him on 5th February, in a week and a half.
The car tax runs until end March, so if I were to confirm the sale on 5th February, I would be charged an additional month of car tax and only receive a refund for one full month. As my tax was £555 for the year, this works out at £46.25 per month. So, completing the paperwork on 5th February will result in a loss of £46.25 car tax.
TBH, this isn't a big issue for me, however, I hate the fact that the DVLA will be getting this money due to their appalling double taxation policy and they are making millions out of car sales in the UK.
Is there any way around paying two lots of tax for the month in which the sale occurs?
I'm aware that I could SORN the vehicle, but then I wouldn't be able to deliver it to the buyer!
If, for example, we completed the sale and paperwork on 31st January (the last day of the month), I would then be able to inform DVLA it had been sold using their online tool and this "should" ensure I get a tax refund for both February and March. However, would the buyer then be charged tax for January as the sale occurred on the last day of January? Or would he only be charged tax from the day after the sale i.e. from 1st February?
I don't believe there is a grace period, so the only way to have a gap would be to SORN the vehicle, which would cause issues.
The car tax runs until end March, so if I were to confirm the sale on 5th February, I would be charged an additional month of car tax and only receive a refund for one full month. As my tax was £555 for the year, this works out at £46.25 per month. So, completing the paperwork on 5th February will result in a loss of £46.25 car tax.
TBH, this isn't a big issue for me, however, I hate the fact that the DVLA will be getting this money due to their appalling double taxation policy and they are making millions out of car sales in the UK.
Is there any way around paying two lots of tax for the month in which the sale occurs?
I'm aware that I could SORN the vehicle, but then I wouldn't be able to deliver it to the buyer!
If, for example, we completed the sale and paperwork on 31st January (the last day of the month), I would then be able to inform DVLA it had been sold using their online tool and this "should" ensure I get a tax refund for both February and March. However, would the buyer then be charged tax for January as the sale occurred on the last day of January? Or would he only be charged tax from the day after the sale i.e. from 1st February?
I don't believe there is a grace period, so the only way to have a gap would be to SORN the vehicle, which would cause issues.
There are two scenarios that would work here, but depend on much trust there is between buyer and seller.
1. Complete the sale in January. You agree to store the car off road until the buyer is really to have it delivered, and the buyer SORN's immediately. The buyer then taxes & insures in Feb and you deliver.
2. You SORN in January. You agree to store the car off road until the buyer is really to have it delivered. When the buyer is ready to take delivery, you both complete the sale online. The buyer then taxes & insures and you deliver.
Is this about the money (easy enough to rectify without any faff ... ask the buyer for an additional £46 as part of your delivery costs), or about the principal of the DVLA getting double tax? If it's about the principal, then it can be worked around ... but requires co-ordination between buyer and seller.
These scenarios also open up all sorts of potential cans of worms. What if the car is damaged after sale, but before delivery is completed? What if buyers remorse kicks in early? I think the simplest thing to do is swallow the money, but if you're willing to chase a point of principal, then please consider what could go wrong before you go ahead.
1. Complete the sale in January. You agree to store the car off road until the buyer is really to have it delivered, and the buyer SORN's immediately. The buyer then taxes & insures in Feb and you deliver.
2. You SORN in January. You agree to store the car off road until the buyer is really to have it delivered. When the buyer is ready to take delivery, you both complete the sale online. The buyer then taxes & insures and you deliver.
Is this about the money (easy enough to rectify without any faff ... ask the buyer for an additional £46 as part of your delivery costs), or about the principal of the DVLA getting double tax? If it's about the principal, then it can be worked around ... but requires co-ordination between buyer and seller.
These scenarios also open up all sorts of potential cans of worms. What if the car is damaged after sale, but before delivery is completed? What if buyers remorse kicks in early? I think the simplest thing to do is swallow the money, but if you're willing to chase a point of principal, then please consider what could go wrong before you go ahead.
Rotary Potato said:
There are two scenarios that would work here, but depend on much trust there is between buyer and seller.
1. Complete the sale in January. You agree to store the car off road until the buyer is really to have it delivered, and the buyer SORN's immediately. The buyer then taxes & insures in Feb and you deliver.
2. You SORN in January. You agree to store the car off road until the buyer is really to have it delivered. When the buyer is ready to take delivery, you both complete the sale online. The buyer then taxes & insures and you deliver.
Is this about the money (easy enough to rectify without any faff ... ask the buyer for an additional £46 as part of your delivery costs), or about the principal of the DVLA getting double tax? If it's about the principal, then it can be worked around ... but requires co-ordination between buyer and seller.
These scenarios also open up all sorts of potential cans of worms. What if the car is damaged after sale, but before delivery is completed? What if buyers remorse kicks in early? I think the simplest thing to do is swallow the money, but if you're willing to chase a point of principal, then please consider what could go wrong before you go ahead.
I can't keep the car once it has been SORN'd as I'm unable to drive it (to deliver it) as it isn't taxed!1. Complete the sale in January. You agree to store the car off road until the buyer is really to have it delivered, and the buyer SORN's immediately. The buyer then taxes & insures in Feb and you deliver.
2. You SORN in January. You agree to store the car off road until the buyer is really to have it delivered. When the buyer is ready to take delivery, you both complete the sale online. The buyer then taxes & insures and you deliver.
Is this about the money (easy enough to rectify without any faff ... ask the buyer for an additional £46 as part of your delivery costs), or about the principal of the DVLA getting double tax? If it's about the principal, then it can be worked around ... but requires co-ordination between buyer and seller.
These scenarios also open up all sorts of potential cans of worms. What if the car is damaged after sale, but before delivery is completed? What if buyers remorse kicks in early? I think the simplest thing to do is swallow the money, but if you're willing to chase a point of principal, then please consider what could go wrong before you go ahead.
nice1two said:
Could you not SORN it at the end of January and then get the new buyer to change owner and tax before you deliver the car
I think this may be the only way, but I would need to delivery it BEFORE I SORN it as the car wouldn't be taxed to be able to deliver it after it has been SORN'd.Ideally, I think I need to sell AND SORN the car on the 31st i.e. deliver it and complete all the documentation, then SORN it. The buyer can then re-tax it when he's ready to use it, after he's had the alterations that need to be made to the car to enable him to drive it.
Is it necessary to wait a period of time to re-tax a car, once it has been SORN'd, or could I SORN it on 31st January and the buy tax it on 1st February? Is there even any point in SORN'ing it for 1 day, or is this even one day?
Decided to call the DVLA and ask for advice.
I asked how I could avoid double taxation when selling a car. Initially, they refused to accept that such a thing happened, then after I explained it in detail they acknowledged it did and told me there was no way to avoid it! Strange that they accepted that I would pay a month's tax and the buyer would pay a month's tax, but they didn't identify this as "double taxation" because it applied to different people! I think that is a telling insight into the DVLA and other government departments like HMRC.
I then suggested the method of SORN'ing the vehicle, either before selling it or the buyer SORN'ing it after they had bought it. Again, they seemed to be confused about why I would want to do that!
Eventually, they agreed that if I sold the vehicle on 31st January and I transferred ownership online, the buyer should then be able to SORN the vehicle online on the same day and this would mean they didn't have any tax to pay until it was re-taxed, so only one lot of tax to pay for January.
TBH, throughout the call I got the impression I was the one leading the conversation. Not sure if this is because their policy is to not give advice that would avoid them receiving a months tax x 2, or because she just didn't understand enough about taxing vehicles, despite working on the vehicle tax support line.
I asked how I could avoid double taxation when selling a car. Initially, they refused to accept that such a thing happened, then after I explained it in detail they acknowledged it did and told me there was no way to avoid it! Strange that they accepted that I would pay a month's tax and the buyer would pay a month's tax, but they didn't identify this as "double taxation" because it applied to different people! I think that is a telling insight into the DVLA and other government departments like HMRC.
I then suggested the method of SORN'ing the vehicle, either before selling it or the buyer SORN'ing it after they had bought it. Again, they seemed to be confused about why I would want to do that!
Eventually, they agreed that if I sold the vehicle on 31st January and I transferred ownership online, the buyer should then be able to SORN the vehicle online on the same day and this would mean they didn't have any tax to pay until it was re-taxed, so only one lot of tax to pay for January.
TBH, throughout the call I got the impression I was the one leading the conversation. Not sure if this is because their policy is to not give advice that would avoid them receiving a months tax x 2, or because she just didn't understand enough about taxing vehicles, despite working on the vehicle tax support line.
Surely you SORN the car on 31 Jan assuming it is off the road.
Once you have the money for the car, you transfer the ownership. On 5th Feb the new owner taxes the car in his name.
Once that's done you drive the car to the new owner. Jobs done.
Unless it's a cash in hand job in which case don't do that!
Once you have the money for the car, you transfer the ownership. On 5th Feb the new owner taxes the car in his name.
Once that's done you drive the car to the new owner. Jobs done.
Unless it's a cash in hand job in which case don't do that!
drgoatboy said:
Surely you SORN the car on 31 Jan assuming it is off the road.
Once you have the money for the car, you transfer the ownership. On 5th Feb the new owner taxes the car in his name.
Once that's done you drive the car to the new owner. Jobs done.
Unless it's a cash in hand job in which case don't do that!
I won't be able to drive the car to the new owner as a) the car would not be taxed and b) I wouldn't be insured to drive it as it is no longer my car!Once you have the money for the car, you transfer the ownership. On 5th Feb the new owner taxes the car in his name.
Once that's done you drive the car to the new owner. Jobs done.
Unless it's a cash in hand job in which case don't do that!
It would be taxed if the new owner taxes it before you deliver it!!
Insurance is a different question I hadn't considered.
Out of interest how far is it to be delivered?
If you really want to avoid the tax and any questions around insurance would it just be easy to go pick the new owner up in your car and drive him back to get his new car?
Insurance is a different question I hadn't considered.
Out of interest how far is it to be delivered?
If you really want to avoid the tax and any questions around insurance would it just be easy to go pick the new owner up in your car and drive him back to get his new car?
Forget the online process.
Fill out the new keeper supplement and send off the logbook by royal mail 2nd class recorded delivery after last post on Friday (31st), make sure the date of sale is 31st or earlier.
It won't be collected until Saturday so won't arrive until Tuesday, quite unlikely the log book will be processed by the time you hand over the keys on the 5th so for all intents and purposes the car is taxed and you're still the rk for the delivery.
This is how I've done it before. There's risk, but so is there every way you do it.
Fill out the new keeper supplement and send off the logbook by royal mail 2nd class recorded delivery after last post on Friday (31st), make sure the date of sale is 31st or earlier.
It won't be collected until Saturday so won't arrive until Tuesday, quite unlikely the log book will be processed by the time you hand over the keys on the 5th so for all intents and purposes the car is taxed and you're still the rk for the delivery.
This is how I've done it before. There's risk, but so is there every way you do it.
For a minute I thought this thread was about me!
I've agreed to pick up a second hand car on the 1st - so the seller will likely pay a whole months tax for one day.
I will of course have to pay tax to drive it away - and a temporary insurance policy for the day.
When I get home, I'll park it on the drive and as the insurance was only for a day, I'll have to SORN it (can't be taxed without insurance) while I sell the old car.
If I can get the old car sold quick enough I will then be able to re-tax it and move the insurance across and get it on the road - and the DVLA will have one months tax three times over!
I've agreed to pick up a second hand car on the 1st - so the seller will likely pay a whole months tax for one day.
I will of course have to pay tax to drive it away - and a temporary insurance policy for the day.
When I get home, I'll park it on the drive and as the insurance was only for a day, I'll have to SORN it (can't be taxed without insurance) while I sell the old car.
If I can get the old car sold quick enough I will then be able to re-tax it and move the insurance across and get it on the road - and the DVLA will have one months tax three times over!
Edited by Jakg on Thursday 30th January 10:19
Brads67 said:
No way to avoid paying DVLA twice for a month when you sell a car now that it cannot be passed on.
Unless it goes straight on sorn. Or is driving to a pre booked MOT
Well that isn't quite true as I outlined earlier, but regardless of that if the seller doesn't notify the DVLA until you have got home there won't be any issues if you pass ANPR cameras as the tax paid by for by the seller will still be in force.Unless it goes straight on sorn. Or is driving to a pre booked MOT
dhutch said:
Brads67 said:
No way to avoid paying DVLA twice for a month when you sell a car now that it cannot be passed on.
Which is for clarification, a crock of s
t, not to mention a bit of a stealth tax on the poor. Would be hard to make the "stealth tax on the poor" tag fit.
Typically, someone might be out £30 or so on average. Not the end of the world if you're maybe spending £10,000 to £20,000 to change your car.
Also its revenue generating, so whilst they probably could change it, they'd have to up the tax overall to cover the lost revenue. Probably not by much, but you're then taxing people who dont change their car that often.
OR they could charge a fee for changing your car....
You point that some can afford it is clearly true, as is the fact that higher tax tends to be on high emissions luxury cars.
However older cars also have higher costs than small new cars, and those running older cars on a 'bangernomincs' type model will change car more often. So while it could be considered over playing it I'm less sure.
Speed cameras are a revenue stream too, and police safely critical laws. Should we start hiding them on bins to reduce car tax?
Daniel
However older cars also have higher costs than small new cars, and those running older cars on a 'bangernomincs' type model will change car more often. So while it could be considered over playing it I'm less sure.
Speed cameras are a revenue stream too, and police safely critical laws. Should we start hiding them on bins to reduce car tax?
Daniel
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